PenCom Removes Pre-Approval Requirement to Speed Up Pension Payments
The National Pension Commission (PenCom) has introduced a new policy aimed at accelerating the payment of benefits to Retirement Savings Account (RSA) holders, eliminating the need for prior approval before disbursements.
Effective June 1, 2025, Pension Fund Administrators (PFAs) will no longer be required to seek PenCom’s approval or obtain a “No Objection” before processing payments for benefits such as Programmed Withdrawal, Retiree Life Annuity, and Temporary Loss of Employment benefits, the commission announced via its official X handle.
However, PenCom clarified that PFAs must still seek approval for depleted RSA accounts and death benefit applications in line with Section 8 (2) of the Pension Reform Act 2014.
Faster Processing for Retirees
The new directive significantly reduces delays in accessing retirement benefits, as PFAs are now required to process and approve eligible applications within two working days of receiving complete documentation. Once approved, Pension Fund Custodians (PFCs) must make payments within 24 hours of receiving instructions from PFAs.
Before this policy change, all benefit applications had to undergo review and approval by PenCom before PFAs could authorize payments, often leading to delays.
Ensuring Compliance and Transparency
PenCom assured stakeholders that it will continue to monitor compliance using regulatory technology platforms and other supervisory mechanisms to uphold transparency and accountability in the pension system.
RSA holders are advised to submit required documents promptly to ensure a seamless process, while prospective retirees are encouraged to submit all necessary paperwork at least six months before retirement to avoid delays.
By removing bureaucratic bottlenecks, PenCom aims to improve service delivery, ease financial strain on retirees, and enhance overall efficiency in Nigeria’s pension system.
